This appropriation funds Department of Community Health
expenditures that are not covered by Medicaid, but mimic the services provided
by the Medicaid program on mental health issues for people whose income and
assets make them ineligible for Medicaid.

The term “Medicaid” is used generally to describe 56 entitlement
programs jointly administered by federal and state governments (states must
participate in at least 14 of them to get federal matching funds). The programs
are designed to help the poor by providing them with short- and long-term
healthcare services. The original Medicaid program was passed in 1965 as part
of Lyndon Johnson’s “Great Society” initiative, in which he declared
“unconditional war on poverty.” Michigan spends $2 billion from its GF/GP
account annually covering the costs of the program, and costs are expected to
increase dramatically.

The services clients may receive under this program include, but
are not limited to, help with substance abuse problems, general counseling,
outpatient services, “inpatient care in a structured, secure environment,”[22]
psychiatric evaluations, hospital care, Intelligence Quotient and other
“projective” psychological testing, health services (minor first-aid treatment,
in-home nursing visits, and dietary services); “occupational therapy” (for
problems that involve work performance); and “specialty services” such as music,
recreational, art, and massage therapies.[23]

Program Recommendation:

This program should be eliminated. The federal government has
established guidelines for the provision of Medicaid services based on a variety
of factors, including assets and income. It is laudable to assist people who
fall outside of the established government categories, but where do expansions
of the state end, and personal and civic responsibility begin? If government
refrained from crowding out private solutions to social ills with high taxes and
regulation, private individuals and institutions could do more to address the
needs of Michigan citizens. Savings: $276,930,200.

This appropriation funds Medicaid substance abuse services. These
services are managed by CMHSPs. Spending on substance abuse treatment is
increasing, and more of the funding burden is being shouldered by taxpayers.
Payments for substance abuse treatment increased 5.4 percent per year from
1987-1997, even as inpatient treatment was increasingly replaced by less costly
outpatient treatment. While this is a slower rate than the growth in overall
national health expenditures (8.2 percent per year), there is cause for
concern. In 1997, $11.9 billion was spent nationally on treating substance
abuse. In that year, 62 percent of all substance abuse treatment funding came
from the public sector, while only 55 percent of all mental health spending came
from government. Taxpayers were increasingly called upon to fund substance abuse
treatment; 61.8 of substance abuse treatment was funded through public sources
in 1997, compared with only 50.3 percent to years earlier. By contrast, private
insurance-funded spending grew only 1.9 percent a year.[26]
This discrepancy suggests a shift to public sources and/or a relative lack
of cost control in public-sector programs.

Recommended Action:

All state
substance abuse programs could be eliminated in favor of private assistance.
Substance abuse is a serious problem that leads to a loss in productivity, the
breakdown of families, and a number of other adverse consequences. However,
this program is an other example of a system that takes resources from families
and communities through taxation, funnels it through expensive state and federal
bureaucracies, and returns a portion of the amount taken to certain selected
individuals and organizations. These resources should be left with individual
families and local communities who are close to the problems, and who can
provide assistance that is more accountable and effective than that from distant
bureaucracies in Lansing and Washington. Savings: $26,127,500.

This appropriation funds respite care for families who have
children with emotional disturbances.

Recommended Action:

The state should remove itself from respite-care services. As with
other forms of respite care, one should commend the hard work of family members
who attend to their ill relatives. But every dollar that government takes from
needy families, businesses, and individuals is a dollar that they cannot use to
solve their own respite problems, or those of their neighbors. Savings:
$3,318,600.

This appropriation funds programs that distribute grants for
substance abuse prevention, education, and treatment to 18 agencies and
treatment centers. The treatment centers are outpatient and residential; there
is no hospitalization.

Recommended Action:

Eliminate this line item for the same reasons addressed under the
“Medicaid Substance Abuse Services” program. Savings: $76,335,400.